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A logo of Japan Exchange Group Inc is seen next to a woman dressed in ceremonial kimono at the Tokyo Stock Exchange January 4, 2016. — Reuters picSINGAPORE, Dec 2 — Asian shares were flat in early trade today following mostly sluggish sessions on Wall Street and Europe, as 10-year US Treasury yields surged to near 18-month highs and crude futures soared to 16-month highs.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, but remained on track to end the week up 0.6 per cent.

Japan's Nikkei, which jumped to an 11-month high yesterday, slipped 0.6 per cent early today as the yen strengthened. It is set for a weekly gain of 0.1 per cent.

Yields on 10-year US Treasuries touched 2.492 per cent yesterday, the highest since June 2015, after data showed factory activity accelerating in November and construction spending at a seven-month high in October.

The strong data boosted the case for higher interest rates, expectations for which have already jumped on promises of fiscal stimulus from the incoming Trump administration and rising oil prices, both potential contributors to inflation.

Investors are now looking to November's employment report due later in the session for further evidence of improvement in the economy.

Global benchmark Brent futures jumped to a 16-month high of US$54.53 (RM242.89) a barrel yesterday after the Organisation of Petroleum Exporting Countries agreed its first output cuts since 2008. Russia also agreed to join output cuts for the first time in 15 years.

US crude, which climbed 13 per cent on Wednesday and yesterday combined, extended the gains to today, climbing 0.2 per cent to US$51.17. It is on track for an increase of 11.1 per cent this week.

“Support for energy stocks may carry through today as oil prices continue to rise in response to Opec's production agreement,” Ric Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note.

While the increase in risk appetite helped lift the Dow Jones Industrial Average to a record closing high, the S&P 500 and the Nasdaq ended the day with losses as expensive technology stocks pulled back.

Earlier, European markets also had a lackluster session, with the STOXX 600 down 0.3 per cent at the close after pulling back from the previous session's three-week high.

Investors remained nervous ahead of a constitutional referendum in Italy and a presidential election in Austria this weekend.

“A weak lead from US markets, Italy's referendum and tonight's release of US jobs data all provide reasons for the stock market to close the week in cautious, wait-and-see mode,” Spooner said.

The US dollar, which hit the highest level since February versus the yen earlier yesterday, retreated after weekly jobless claims, which hit a 43-year low in mid-November, rose to its highest level in five months last week.

Despite the increase, claims remained below the 300,000 threshold, which is associated with a healthy labor market, for the 91st straight week, and layoffs fell 12 percent during the month.

The US dollar closed down 0.3 percent yestersday and was trading 0.1 per cent lower at 113.78 yen early today, but remains on track for a weekly gain of 0.5 per cent.

The dollar index, which tracks the greenback against a basket of six major global peers, also slipped 0.1 per cent today, extending losses for the week to 0.6 per cent.

The British pound touched a near-two-month high versus the dollar yesterday after Brexit minister David Davis said Britain would consider paying into the European Union budget for market access.

Sterling was steady at US$1.2585 in early Asian trade today.

The euro also strengthened yesterday, rising 0.7 per cent, and was steady at US$1.06640 today. — Reuters